March 28 (Bloomberg) -- SAC Capital Advisors LP urged a
federal judge to approve its record $1.8 billion insider-trading
settlement with the government, saying the firm is “deeply
remorseful” for the illegal acts of its employees.

SAC lawyer Martin Klotz asked U.S. District Judge Laura
Taylor Swain in a two-page letter yesterday to sign off on the
agreement, which also calls for the firm to close its investment
advisory business. A sentencing hearing before Swain is
scheduled for April 10 in Manhattan.

“The defendants are deeply remorseful for the misconduct
of each of the individuals who broke the law while employed by
them,” Klotz wrote. “Even one person crossing the line into
illegal behavior is unacceptable. The defendants are chastened
by this experience, but are determined to learn from it.”

Four SAC units were indicted last year, accused of reaping
hundreds of millions of dollars in illegal profit through
insider trades by employees dating to 1999. Steven A. Cohen, 57,
the firm’s founder, faces an administrative action by the
Securities and Exchange Commission alleging he failed to
supervise the hedge fund’s activities. Eight current or former
SAC employees have been convicted of insider trading charges.

Manhattan U.S. Attorney Preet Bharara called SAC Capital
“a veritable magnet for market cheaters” when the indictment
was filed in July. Cohen has denied wrongdoing and isn’t accused
of a crime.

Strong Message

“There can be no doubt that these and other penalties send
a strong public message about the costs of the conduct that have
brought the defendants before Your Honor,” Klotz wrote in the
letter.

In November, SAC’s general counsel, Peter Nussbaum, entered
guilty pleas on behalf of the firm to four counts of securities
fraud and one count of wire fraud. At the time, Swain said she
wanted to review a pre-sentence report and sentencing
submissions from both sides before deciding whether to accept
the agreement.

U.S. District Judge Richard Sullivan in November approved
the $900 million settlement of a civil money-laundering case by
the government that is part of the overall agreement. Swain will
decide whether to agree to a fine of $900 million to resolve the
criminal case.

Under the settlement, SAC will become a firm managing only
Cohen’s personal wealth. The firm, which is changing its name to
Point72 Asset Management, said in February it shrunk its
headcount to 850 people from 1,000.

Highest Range

Klotz told Swain that the proposed fine is more than the
highest range of $411 million to $823 million under the advisory
federal sentencing guidelines.

In December, a federal jury in Manhattan convicted Michael
Steinberg, SAC’s longest-serving manager, in an insider-trading
scheme after a five-week trial.

Mathew Martoma, a former SAC fund manager, was found guilty
by a different Manhattan jury in February of using secret
information about the clinical trial of an Alzheimer’s drug to
trade in shares of Elan Corp. and Wyeth.

Steinberg and Martoma haven’t been sentenced. They were
both convicted of charges that carry maximum sentences of 20
years in prison.

Pleaded Guilty

Also yesterday, a group of Elan and Wyeth investors suing
SAC over alleged insider trades in those companies filed a
revised complaint claiming Cohen traded on inside information he
got from Martoma. The investors claim SAC made at least $555
million in profits and losses avoided on Elan and Wyeth trades
on illegal tips about the Alzheimer’s drug, bapineuzumab.

The new complaint makes public for the first time investor
allegations involving Cohen that were previously filed with the
court under seal. The claims include that Martoma told Cohen
about the drugmakers’ confidential plan to put bapineuzumab into
Phase 3 testing. When the plan was publicly disclosed, Elan rose
12.6 percent and Wyeth gained 3.6 percent, the investors claim.

The investors also said that Cohen adopted policies to give
the firm access to inside information, hiring employees with
access to company insiders and paying higher trading commissions
than other hedge funds to win access to nonpublic information.

The criminal case is U.S. v. SAC Capital Advisors LP, 13-cr-00541, U.S. District Court, Southern District of New York
(Manhattan). The civil case is U.S. v. SAC Capital Advisors LP,
1:13-cv-5182, U.S. District Court, Southern District of New York
(Manhattan). The investor suit is Kaplan v. SAC Capital Advisors
LP, 12-cv-09350, U.S. District Court, Southern District of New
York (Manhattan).